Banks, insurance companies and pension funds are investing $34 billion in fossil energy, according to a report by a group of NGOs

Banks, insurance companies and pension funds are investing $34 billion in fossil energy, according to a report by a group of NGOs

Coal-fired power plant in China.Reuters photo

This is evidenced by research conducted by The Fair Money Guide, a partnership between Amnesty International, Oxfam Novib and Milliodefense, among others. ING, insurers Allianz and Aegon, and pension funds ABP and PFZW are the biggest investors in polluting energy.

Thus, investors are fueling the climate crisis, writes The Fair Money Guide. So voluntary agreements to contribute to the Paris climate agreement are of little use. Banks lent more than 13 billion euros to energy companies between 2018 and 2020, nearly 70 percent of which went to fossil energy. Worldwide, banks invest €394 billion in fossil energy. Since the 2015 Climate Summit, this total has been around €3.5 trillion, calculated Bloomberg. However, the division between fossil energy and renewable energy is more or less equal across the world – banks have invested nearly €400 billion in green finance this year.

Many Dutch banks are much less than that. With €9.1 billion, ING has been the largest lender to the energy sector in the past three years. Of that credit, 75 percent went to fossil energy, and ABN Amro was just below that at 71 percent. The Hague Investment Bank NIBC has invested €338 million entirely in fossil energy. Rabobank invests heavily in sustainable energy, increasing its share from 63 percent in 2018 to 88 percent in 2020. At De Volksbank and Triodos, all investments are already going into sustainable energy sources, and Bonk does not invest in the energy sector. A spokesperson for the Dutch Banking Association said that banks see the urgent need to reverse climate change, but unfortunately the Dutch economy still runs largely on fossil energy.

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In relative terms, PMT was the largest investor in pollution among pension funds, with 95 percent of energy investment in fossils. In absolute terms, this was an ABP of 86 percent and a total of over 8.5 billion. Among insurance companies, Aegon ranked first with 93 percent, and in absolute terms it was Allianz with 90 percent – with a total of 16 billion euros.

To mitigate climate change, companies in the energy sector (and beyond) must make huge investments in developing cleaner operations – financial institutions play a critical role in this. In May this year, the International Energy Agency, an intergovernmental advisory organization, published another pathway to fully reduce greenhouse gas emissions. There is no room in this process to invest in new fossil fuels. All oil and gas-fired power plants should be phased out.

The Fair Money Guide report now shows that of the 25 banks, pension funds and insurance companies examined, at least 22 are not operating in line with the IEA’s path. Two institutions, BPL Pensioen and Pensioenfonds Vervoer, have not been investigated because they are not transparent enough about their investments in the energy sector.

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